WEBVTT - ICYMI: YouTube Is Coming for the Sitcom

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>You're listening to Bloomberg Business Week with Carol Masser and

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<v Speaker 2>tim Stenoveek on Bloomberg Radio.

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<v Speaker 3>Hey, we want to get to a story. Do you

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<v Speaker 3>watch YouTube a lot?

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<v Speaker 2>I actually do. I feel like it's so easy to

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<v Speaker 2>just continue to go down rabbit holes of all the

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<v Speaker 2>things that you watch one thing, another video will come up,

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<v Speaker 2>and it just I probably spend too much time.

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<v Speaker 3>We have dedicated channels that we definitely go to. We

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<v Speaker 3>Saiale and we watch some of the sailors that are

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<v Speaker 3>going around the globe. So we like we'll like tune

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<v Speaker 3>in every week or two weeks when they've got a

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<v Speaker 3>new episode. Got to keep in mind YouTube, I've spent

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<v Speaker 3>the past few years trying to make itself the centerpiece

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<v Speaker 3>of the living room. For two decades, it has tried

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<v Speaker 3>to convince advertisers that it's the future of entertainment. It

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<v Speaker 3>has had some problems making that case. So rights our

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<v Speaker 3>own Lucas Shaw. We want to head to our la

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<v Speaker 3>bureau for Bloomberg News and Bloomberg News Managing Editor, Media

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<v Speaker 3>and Entertainment head Lucas Shaw. He's really the ringleader, I

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<v Speaker 3>should say behind our Bloomberg screen time coverage and vertical

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<v Speaker 3>as well. Hey Lucas, good to check.

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<v Speaker 1>In with you.

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<v Speaker 3>Great story. YouTube. It feels like it's I don't know,

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<v Speaker 3>I feel like everybody's talking about it. It's coming into

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<v Speaker 3>its own what's going on and is kind of everybody

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<v Speaker 3>talking about it with good reason.

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<v Speaker 1>Well, I'd say everyone in Hollywood is paying more attention

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<v Speaker 1>to it than they used to be. You know, it's

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<v Speaker 1>funny to talk about YouTube as anything new, right, It's

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<v Speaker 1>been around for twenty years as of this year. It's

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<v Speaker 1>been widely popular for at least a decade, if not longer.

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<v Speaker 1>You know, it's the most popular music service in most

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<v Speaker 1>of the world. It's become a very popular platform for podcasting.

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<v Speaker 1>You know, it's where people essentially watch late night. It's

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<v Speaker 1>the new home of all I use it for yoga.

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<v Speaker 1>But I think that what's really happened over the last

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<v Speaker 1>couple of years is twofold one is it's just as

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<v Speaker 1>traditional entertainment has gotten more challenge and as the TV

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<v Speaker 1>business has shrunk, advertisers have looked to YouTube as the

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<v Speaker 1>future and started to spend more and more money there.

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<v Speaker 1>Creators who have been there for a long time have

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<v Speaker 1>started to build businesses and been able to raise real capital.

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<v Speaker 1>And then I think data also does play a real

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<v Speaker 1>role here where Nielsen puts out these monthly reports on

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<v Speaker 1>how much people how much time people are spending watching

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<v Speaker 1>a given streaming service on television, and YouTube has gone

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<v Speaker 1>from being already number two behind Netflix now being the

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<v Speaker 1>unequivocal number one. People spend more time watching YouTube on

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<v Speaker 1>a television than everything Disney owns, that's streaming, that's TV networks,

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<v Speaker 1>and I think that has really reinforced for people in entertainment, like,

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<v Speaker 1>holy crap, YouTube is really big, and we need to

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<v Speaker 1>look at this again.

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<v Speaker 2>What do we know as far as behind Alphabet's efforts

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<v Speaker 2>when it comes to streaming When you think about other rivals,

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<v Speaker 2>say like Amazon with Amazon Prime and the streaming services

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<v Speaker 2>that they have. When you're mentioning obviously Netflix two.

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<v Speaker 1>Here, well, look, YouTube is just is lead and bounds

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<v Speaker 1>bigger than what any of the other tech companies have,

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<v Speaker 1>right Apple, Apple and Amazon have their own streaming services.

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<v Speaker 1>Apples is very niche, Amazon's is pretty big, but still

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<v Speaker 1>much smaller. Both of them view themselves, I think primarily

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<v Speaker 1>as homes and retailers for other people's wares. Right, like

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<v Speaker 1>Amazon is a it's core a retailer. It wants to

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<v Speaker 1>sell everyone else's streaming service. Apple would wanted to make

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<v Speaker 1>its TV app at the place where you could come

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<v Speaker 1>and find everything. The challenge that a lot of them

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<v Speaker 1>ran into as a company like Netflix was like, I

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<v Speaker 1>don't want to collaborate with you on this. I'm trying

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<v Speaker 1>to become the place that everybody goes. You know, YouTube

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<v Speaker 1>has aspects of it being this destination.

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<v Speaker 2>Right.

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<v Speaker 1>They sell the live TV service YouTube TV. You can

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<v Speaker 1>pay for paid streaming services and stream them within YouTube.

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<v Speaker 1>There are a lot of other things you can do

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<v Speaker 1>besides watch core YouTube. But it has the biggest advantage

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<v Speaker 1>of all, which is it has just YouTube, and so

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<v Speaker 1>many people already hum for that, and it becomes a

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<v Speaker 1>natural hub to direct them to all these other things.

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<v Speaker 3>So I'm going to ask you, Lucas our Sebastian Escobar

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<v Speaker 3>is just saying YouTube premium like kind of changed his life,

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<v Speaker 3>changed his mind. He said, it's like nineteen dollars a month,

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<v Speaker 3>a bit pricey, but no ads. I mean, is that

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<v Speaker 3>where they're making their money or do they need to

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<v Speaker 3>be providing content that advertisers want to advertise with.

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<v Speaker 1>Well, look, YouTube still makes the majority of its money

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<v Speaker 1>from advertising. You know, I think last year it was

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<v Speaker 1>I'm going to say it's about thirty five billion, but

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<v Speaker 1>don't hold it to that. Maybe it was a little lower,

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<v Speaker 1>Maybe it was closer to thirty Subscription wise, the outside

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<v Speaker 1>estimates now say the YouTube business is probably fifteen to

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<v Speaker 1>twenty billion. That's also massive, it's not as big as advertising.

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<v Speaker 1>That's the mix of YouTube TV, the YouTube premium. I

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<v Speaker 1>think YouTube premium is great for certain people, and the

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<v Speaker 1>music service has also is a big lore. You know,

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<v Speaker 1>YouTube has become one of the bigger paid music services

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<v Speaker 1>on top of being free. But it's still that's like

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<v Speaker 1>the nice growth area and something they're putting a lot

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<v Speaker 1>of effort into. But YouTube is a division of Alphabet.

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<v Speaker 1>Alphabet makes most of its money from advertising. I don't

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<v Speaker 1>think that's going to change anytime soon. But they want

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<v Speaker 1>to have a little bit of everything. And you know,

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<v Speaker 1>there's the quality of programming that you see on YouTube,

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<v Speaker 1>I think is getting better each year. And that's one

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<v Speaker 1>of the things that I tried to get at is

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<v Speaker 1>there's always been this perception of YouTube as sort of

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<v Speaker 1>a home for lower quality smut, and there's some of

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<v Speaker 1>that still. There's a lot of that still there. Right,

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<v Speaker 1>It's sort of an inexhaustible amount of video that you

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<v Speaker 1>can watch on YouTube, but the stuff at the top

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<v Speaker 1>end is starting to rival what you could see on TV.

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<v Speaker 2>How are Hollywood executives trying to jump in on this?

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<v Speaker 1>Well, so there's a long and checkered history of Hollywood

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<v Speaker 1>and YouTube in that. About ten years ago, maybe twelve

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<v Speaker 1>years ago, there was sort of an initial rush of investment,

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<v Speaker 1>and Hollywood companies invested in all these companies called multi

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<v Speaker 1>channel networks. There were loose confederations of channels where they

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<v Speaker 1>the company itself didn't really own anything. They did a

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<v Speaker 1>lot of business like ad sales or distribution on behalf

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<v Speaker 1>of the channels. Turns out those were not very good businesses.

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<v Speaker 1>But Disney spent a bunch of money on one, Framework's

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<v Speaker 1>Animation bought one, Warner Brothers bought one or two. Now

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<v Speaker 1>I think they're looking at that again, but trying to

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<v Speaker 1>be smarter about how they go about it. So that

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<v Speaker 1>can be either in kind of taking just licensing existing shows. Right,

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<v Speaker 1>So Netflix has Coco Melon, they have Miss Rachel, they

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<v Speaker 1>have the Sidemen, Amazon has a big show with Mister Beast,

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<v Speaker 1>and that's essentially paying these people to bring what's already

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<v Speaker 1>popular over to them. Or they may invest in some

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<v Speaker 1>of these companies or try to strike deals, and those

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<v Speaker 1>haven't happened yet, but I think they probably will at

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<v Speaker 1>some point. You'll see an effort to kind of buy

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<v Speaker 1>someone who has brands or properties that might work.

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<v Speaker 3>Yeah, it's just kind of fascinating. I guess, you know,

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<v Speaker 3>does it bottom Lucas? I mean, going forward, do they

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<v Speaker 3>want to have I'm assuming the majority of their content,

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<v Speaker 3>you know, produced well, or do they like this idea

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<v Speaker 3>that there's like kind of anybody can create a YouTube

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<v Speaker 3>channel and put some content.

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<v Speaker 1>Up there in they in that case is YouTube.

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<v Speaker 3>Well I'm thinking about Yeah, like I guess YouTube creating,

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<v Speaker 3>I guess their own content. It sounds like they want

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<v Speaker 3>to kind of up the quality of it, but I

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<v Speaker 3>just feel like there's just so many other people do

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<v Speaker 3>it too, and some of it's really good, some of

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<v Speaker 3>it's not.

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<v Speaker 1>I don't think YouTube wants to finance a lot of

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<v Speaker 1>its own programming. That could change, but they have dabbled

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<v Speaker 1>in that over the years and it hasn't gone very well.

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<v Speaker 1>And I think they much prefer being this neutral distributor

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<v Speaker 1>and being a platform where people can upload anything, and

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<v Speaker 1>they might invest or put money behind certain areas where

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<v Speaker 1>they want to push people. But they have alphabet, Google,

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<v Speaker 1>YouTube and any part of that. Glasses has never shown

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<v Speaker 1>a ton of interest in being a proper studio in

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<v Speaker 1>the same way that Amazon and Apple are now. Now

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<v Speaker 1>that could change. Someone made a good point to me

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<v Speaker 1>the other day, which is like, if you're them and

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<v Speaker 1>you want to be ahead and AI, would you want

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<v Speaker 1>to buy a big studio and use that copyright to

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<v Speaker 1>train your video model. Maybe, But to date, funding entertainment

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<v Speaker 1>or kind of directly funding production has not been something

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<v Speaker 1>that YouTube is liked the lot.

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<v Speaker 3>All right, Well, it's such a great deep dive, and

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<v Speaker 3>I just feel like we are increasingly when we're talking about,

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<v Speaker 3>like where everybody's watching, we are talking so much about YouTube. Lucas,

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<v Speaker 3>thank you as always really appreciated. Chris Bloomberg, News Managing Editor,

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<v Speaker 3>Media and Entertainment. Lucas Shaw. Check out his story. It's

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<v Speaker 3>in the weekend addition two of Bloomberg Business Week, and

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<v Speaker 3>you can check it out and read a little bit more.

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<v Speaker 3>In terms of details, there's some great. I mean, I

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<v Speaker 3>think Lucas touched on it. But according to Nielsen, an

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<v Speaker 3>average of more than seven million people in the US

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<v Speaker 3>are watching YouTube Tube on a TV at any given time,

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<v Speaker 3>more than watching Netflix and Amazon Prime Video combined. Fastest

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<v Speaker 3>growing audience being viewers sixty five and over. I don't know,

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<v Speaker 3>it's just kind of wrong. We watched it a lot

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<v Speaker 3>in our hassole. Yeah,